The domestic cement industry has registered a 17% y-o-y growth in dispatches for the month of August 2009. The industry dispatched 15.4mn tonnes of cement during the month, compared to 13.2mn tonnes during the same period last year.
However, on a sequential basis, dispatches were lower by 3.2%. On the production front, the output was higher by 17.8% to 15.5mn tonnes, from 13.2mn tonnes last year.
The higher dispatch number came on the back of the rise in the government’s expenditure on infrastructure projects and the delayed monsoon season in most parts of the country.
However, it may be noted here that the robust dispatch growth of 17% y-o-y has is on the back of a low base effect of last year, as the demand for cement had fallen significantly, due to lower demand from the construction sector. We maintain a neutral view on the sector.